This paper examines the role of morphology in gradeschool children's learning to read nonpointed Hebrew. It presents two experiments testing the reading of morphologically based nonpointed pseudowords. One hundred seventy-one Hebrew-speaking children and adolescents in seven age/schooling groups (beginning and end of 2nd, 3rd, 4th, 7th, and 11th grade) and a group of adults participated in the study. Participants were administered two tasks of reading aloud nonpointed pseudowords with morphological composition: words in isolation and words in sentential context. Results pinpoint the developmental milestones on the way to efficient nonpointed word recognition in Hebrew: learning to use morphological pattern cues to fill in missing phonological information, where second grade is an important "watershed" period; and overcoming homography by learning to detect morphosyntactic cues, an ability that develops more gradually and over a longer period than pattern recognition.